Pessimism continues to dominate the market, which nervously awaits new statements from Christine Lagarde and Jerome Powell
Investor pessimism remains in the final stretch of a quarter when fears of a recession are on the rise in the market. Hardly anyone now doubts the pain that central banks will inflict on the economy with interest rate hikes.
But the fight against inflation has become a priority objective of the monetary organizations, as Christine Lagarde will predictably reflect in a speech to the European Parliament today. “The expectations of interest rate hikes and the negative impact this process could ultimately have on global economic growth will continue to weigh on the mood of some investors who, contrary to what they have done in recent months, are less willing to take advantage of price reductions to increase their risk exposure,” they say from Link Securities’ analytics department.
Against this backdrop, the Ibex-35 is accelerating bearish pressure with a drop of more than 1% in the early trading phases, to 7,343 points, with most values in the red, led by ArcelorMittal (-3.41%), Repsol (- 1.12%), Sacyr (-1.11%), Inditex (-0.9%), Grifols (-0.875) and Enagás (-0.69%).
There are fears of economic contraction, especially in the debt market, where the yield on the 10-year Spanish bond (which moves inversely in price and indicates what investors need to buy Spanish debt) has already risen above 3.48%.
Some commodities, such as oil, continue to move in the same downward direction, with a barrel of Brent oil, a benchmark in Europe, trading at $83, while the US West Texas is trading at $77.
Also worrying, and many, the strong declines that the euro continues to register in its crossing with the dollar. The single currency is already a long way from parity, with the cross between the two currencies at $0.9553.
A situation that will undoubtedly put even more pressure on the European Central Bank (ECB) not to lag behind the US Fed in terms of rate hikes.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
